French startup Green-Got is constructing a substitute for your traditional checking account with a give attention to climate change. Essentially, Green-Got guarantees that your savings and the cash that’s sitting in your checking account aren’t going to finance fossil fuel projects and other polluting industries.
The startup recently raised a $5.5 million (€5 million) funding round led by Pale Blue Dot. The community of Green-Got’s customers contributed nearly €2 million to this funding round. Green-Got managed its equity crowdfunding campaign through Crowdcube with around 1,300 investors.
As a neobank, Green-Got doesn’t wish to stand out in the case of its feature set. Clients can create an account using Green-Got’s mobile app in only a number of minutes. They get a current account with a French account number. A couple of days later, they receive a debit card.
That card works with Apple Pay and Google Pay. And the startup doesn’t charge any foreign transaction fee on top of Mastercard’s exchange rate. Each time you make a purchase order together with your card, you receive a push notification in your phone in only a number of seconds.
In other words, Green-Got ticks all the precise boxes in the case of providing the fundamental banking features. “We’re providing the perfect features from Revolut and N26 which have convinced many users, but at the identical time you might have the perfect of impact finance,” co-founder and CMO Maud Caillaux told me.
What makes Green-Got different is that the startup desires to give attention to one vertical specifically — and that’s climate. Over the past few years, several studies have shown that big retail banks spend money on multinational energy corporations that finance invasive fossil fuel projects. And that’s just the tip of the iceberg as there are various corporations that don’t necessarily work on this industry but still produce large emissions of greenhouse gases.
With Green-Got, customers know obviously that their money isn’t going to finance any such corporations. Green-Got isn’t technically a bank, it’s a payment institution that partners with a bank (Crédit Mutuel Arkéa). When customers hold money of their account, that cash isn’t invested in any way. It just sits there, waiting for the subsequent money withdrawal.
In terms of consumer-facing features, Green-Got showcases the carbon dioxide equivalent (CO2e) of your card purchases so that you could get a way of your personal impact on the environment. As an illustration, spending €500 on Air France’s website probably means that you just made a purchase order with a big climate impact in comparison with spending €500 at a second-hand bike shop.
The startup generates revenue from subscriptions. An account costs €6 per thirty days. There isn’t any free tier as the corporate is prioritizing sustainable growth over growth in any respect costs. There are currently 13,000 paid customers.
For those who’re aware of neobanks, it’s possible you’ll know that fintech startups also generate revenue from interchange fees. Each time you pay together with your card, the cardboard transaction fees are split between the merchant’s bank, the network provider (Mastercard as an illustration) and the shopper’s financial institution (Green-Got in that case).
Green-Got doesn’t wish to generate revenue from these fees. That’s why the corporate has chosen a number of nonprofits with its customers in order that Green-Got could make donations based on those interchange fees. “It represents a whole bunch of hundreds of euros,” Caillaux said. The startup will soon enable payment roundups for donations as well.
In the long run, Green-Got also plans to launch savings accounts in the shape of assurance-vie contracts. The corporate is evaluation and handpicking all of the financial products which are going to contribute to the basket of investments because certifications aren’t enough in the case of funds.
Generali will manage the contracts on the behalf of Green-Got. “It’s as if we’ve the recipe for the cake and so they have the factories to make the cakes,” Caillaux said.
Neobanks have been around for some time and lots of people are actually aware of the concept. A couple of years ago, many entrepreneurs wanted to start out a ’neobank for x’, but that trend faded away. Green-Got arrives in the marketplace a bit later but could also avoid all of the pitfalls that include running a neobank.
Along with more generalist challenger banks, Green-Got competes with traditional retail banks which are trying to include climate impact of their priorities, comparable to the Crédit Coopératif or La Nef. It’s going to be interesting to see how big Green-Got will change into in the approaching years.
